Email The automotive manufacturing industry has a lot of moving parts — and not just the ones on their products. The automotive supply chain is complex and constantly moving as the global economy fluctuates.
It shows that companies are most concerned with supplier product quality when every other factor is also involved in the supplier selection process. It is concluded that Following the product quality, human resources factor is the next factor that can critically affect the supply chain through supplier failure.
Financial situation of the supplier company is ranked the third leading supplier selection criteria that Financial power of supplier company defines issues like supplier financial vulnerability against unstable market, rate of return on investment, production cost, and financial investment for future production enhancement.
Government policies and regulations was considered as a main risk factor that can affect the supply chain more severely in third world contraries as well as developing countries, where changing foreign policies and domestic instability can affect supplier performance.
In the designed multi-criteria supplier selection model, it is found that The regression analysis of the designed vendor selection model revealed that It is worth mentioning that in large enterprises that their supply chain cooperates with international suppliers, environmental issues [ 38 ] with above items are of paramount importance to the enterprises for supplier selection.
Vendor Selection Risk Management Framework Research findings are integrated in this section and a supplier selection model is proposed.
The proposed framework suggests critical areas to be considered for proper supplier selection while it allows companies to have their own evaluation method in the beginning. In fact, the proposed model or framework summarizes that how any of the risk factors and into what extent may affect their supply chain through supplier selection.
It suggests areas to be inclusively studied and assessed in supplier evaluation. The proposed vendor selection framework applies constraints Application of scm in automotive industry lower the uncertainty in the final decision. Figure 3 demonstrates the proposed supplier selection framework with every details of the selection process.
In a top to bottom approach, primarily, the main companies are given the option to have their personalized evaluation process of the available suppliers.
Next, six fundamental risk factors or criteria, which are extracted from the literature and are tested through the questionnaire data analysis for their actual importance and influence on the supply chain and supplier selection, are proposed to the supply chain managers to reconsider their supplier evaluation.
To be more specific in each criterion, based on the descriptive data analysis result, several sub-criteria or factors are pointed for critical vendor assessment in a particular criterion or risk factor. For the assessment of the vendor's product quality, it is advised to look into its machinery and equipment performances in terms of technology advancement and flexibility, machineries production capacity, and performance of its quality control department regarding raw material and final products quality control.
In terms of human resources in supplier company, it is recommended to investigate the vendor's level of stability in their organizational and manufacturing operations, level of stability of management board, partners and stakeholders to assess stability in company plans and decision making, and personnel skill and expertise.
Workflow of the outlined model Framework. To assess vendors' financial power, the proposed framework highlights the investigation on the vendors' vulnerability against market fluctuation, level of costs of sale operation according to desired standards pricing. The next external risk factor in the conceptual model within the framework is governmental support and threat towards the vendors.
To assess the vendors in this perspective, it is recommended to look into the level of governmental support towards the company and its products, and level of supplier access to the international market according to the governmental policies and regulations.
In a general sense, it is believed that looking into the proposed critical areas for assessment of a particular risk factor or criteria in a specific supplier company, are crucial in defining the level of importance of that risk factor in the particular company.
However, numerous sub-criteria can be utilized for a more comprehensive evaluation of the presence of any type of risk in a company. The framework uses scaling of one to five for evaluation of the companies in each risk factor. The proposed supplier selection framework recommends omitting the vendors with scores of below 3, at any of the criteria, from the selection process.
Accordingly, the overall score of each vendor is calculated based on the obtained model and risk factors weights form multiple regression analysis. Obviously, the vendor with higher total score is selected. The proposed supplier selection framework defines a selection criterion when two or more suppliers have equal scores.
Therefore, between the vendors with the same score, the vendor with higher score at quality qualification assessment is selected; and if they have the same quality score then next factors will be compared until the best supplier is chosen. The proposed framework can be of a great use for reducing the risk of supply chain disruption through proper vendor selection in the supply chain management universe.
The framework can be beneficiary to every automotive manufacturer company regardless of having a prior vendor selection and evaluation model; because the proposed framework is applicable to incorporate into running models and can also perform as a primary vendor selection process.
The proposed supplier selection framework was validated using a survey on its implementation capabilities among the automotive industry managers and decision makers of the studied car manufacturing companies. A total number of 50 questionnaires have been distributed among the companies and 30 reliable questionnaires have been collected.
The proposed framework received positive comments from all the three companies Figure 4.Parasoft Virtualize The service virtualization solution that brought virtual test environments to the industry.
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The economic and social importance of the automotive industry explains the need for researching improved ways of organising and managing the diverse processes involved in the production of motor vehicles.
Furthermore, the management of supply chains and inter-organisational relations has. PURCHASING AND SUPPLY CHAIN MANAGEMENT FUNCTIONAL EXCELLENCE & INTEGRATION FOR COMPETITIVE SUCCESS ABOUT THE SPONSORS & FACULTY The Automotive Industry Global Purchasing and Supply Chain Management Seminar is a joint offering by Wayne State University’s Mike Ilitch School of Business Administration and the Automotive Industry Action Group (AIAG).
Recent emphasis on global climate change is increasing pressure on automotive exec-utives to make the right decisions in many areas, including R&D and manufacturing.
In fact, emission-level targets, currently in question, threaten to alter the entire structure of the auto industry.